When is it appropriate to search for assets in a court case? Whether it’s for divorce, probate, or civil litigation, when do you search for assets? Well, you can search for assets before and after, and in some cases, there may even be an opportunity to search for hidden assets after a case has been settled. For example with divorce many times, spousal maintenance child support distribution of assets has been done and if later it’s discovered that assets were hidden, that case can be reopened. So let’s take a look at those scenarios of when to search for hidden assets in a court case, and how that might be done. Remember, we’re not attorneys and we’re not giving you legal advice. These are just observations from the investigative point of view that might help you or your attorney come up with a legal theory or strategy that might help your case.
Asset search for civil litigation
There are a few reasons to run an asset search at different times during the case. One is even prior to filing the litigation. The plaintiff might want to check the assets of the potential defendant to see first, do they have assets to satisfy the judgment If you win your case. Is it worthwhile, does the other party even have any money to pay?
The other thing you might want to check pre-litigation: do they have too many assets? So if you’re filing a lawsuit, let’s say you know $50,000 worth of damage and your defendant has $20 million in the bank, you might not want to fight that case cause they might just outspend you legally and just run you into the ground. So you want to find that sweet spot of personal financial statements, equity, and the current net worth of the defendant before you go ahead with litigation.
What if you’re a defendant?
Well, If somebody sues you, you might want to check their assets to see what you’re up against. Also to see if it’s worth doing a countersuit or a counterclaim. If they’re suing you for something there’s obviously some controversy or conflict, which means you may have some claim against them. So you might want to run that asset search. Once the case is filed, you may want to run an asset search then if you haven’t already to see if these assets are changing. Are the parties in the case moving assets to try to conceal them? Many times, once the defendant is sued, they’ll start moving assets around trying to hide them. So in case they lose, the plaintiff can’t get at their assets.
For example, they may have a piece of real estate and they may quit-claim the deed to somebody else so it gets it out of their name. They may take money out of their bank account, to seem like there is less available. Finding that out early on in the case can help you, first of all, to get a snapshot of what the assets are initially. If later on they’re moved, you know what they were. Second of all, if you can show bad faith, or what’s called a fraudulent conveyance, you and your attorney can possibly use that in court to show that there may be legal remedies you want to ask for. Maybe freezing of assets, maybe additional legal fees because the person made you have a higher expense, maybe it shows bad faith and that’ll help your underlying case. Get good legal advice on this from a qualified attorney.
What about at the end of the case?
Well, certainly now is the time to find out where the assets that the defendant holds are. If you’ve received the judgment against them, you can start garnishing them. If they have a bank account you take your writ of garnishment to the bank, slap it on the counter, and take the money out of the bank. If they have real estate you put a lien on it. If they have a vehicle you go through the legal process of recovering that asset.
What if you have an old judgment?
Maybe you won a lawsuit five or six years ago and you’ve collected some money or maybe you haven’t, but now you want to look at collecting. Now you want to see what assets there are at that point in time. Many times the defendant in the case who has lost a judgment will be very cautious about holding assets in their name for some period of time 2-5 years after the dust settles a little bit. Sometimes they think, “now I’m in the clear, so I don’t have to hide assets anymore”, and they start being less cautious. Now’s the time to find those assets.
Asset search for divorce
The same goes for divorce cases as for asset search for civil litigation. Do the searches at various intervals, but also, if you have already had a completed divorce settlement, and then later on you find or suspect that the other party withheld disclosure of assets throughout the process. If you find them later, there is a process where you can request that it’s opened back up and you bring those assets back in for distribution. It’s not uncommon for a party in a divorce once the case is over in their minds to now start to let those assets come back in.
For example, if somebody at the end of the divorce had, $150,000 in the bank, and no house, that was everything they had to be distributed. Now, three years later, they have a $2 million house and half a million in the bank. Well, where did that come from? Were they hiding it and now they brought it back in? Did they earn all of that in three years? Those are things you want to know because if there were assets that were concealed, it’s not like game over. You can reopen the case and bring those back in with proper legal advice.
Asset search for probate
Many times when there’s a death in a family, the parties in the family sometimes have different opinions about where the assets of that deceased person should go. There’s usually a will or some type of final wishes and the executor of the state will distribute the assets. Sometimes one or more parties will maybe do something to compromise that will. Maybe if the will says all the money in the bank goes to this person, maybe they’ll take money out of the bank before it gets distributed. Maybe real estate gets encumbered with mortgages. Maybe real estate gets transferred to somebody else. Maybe vehicles go away.
Probate is a very specific process. The executor has to distribute the assets exactly how it’s described in the will. However, if that document doesn’t prescribe in detail the nature and extent of assets, sometimes it can be misconstrued or a person especially one who’s very close in proximity to that estate can do shady things. In a lot of the cases we get, one party is living halfway across the country and the family’s other party is living next door to where the person died. The party living next door finds a way to squirrel away a lot of assets so the person that lives far away never knows anything about them. A good asset search will uncover this.
So those are three examples of different types of cases when you should run asset searches and how you should document the flow of funds not just what the snapshot is today, but how they changed over time. By doing this, you know what assets are properly within the estate or judgment or litigation and which ones have been improperly removed from the claims of third parties.
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